ARTICLE
TITLE

The Implications of Organizational Slack-Resources Heterogeneity toward CSR Expenditures 10.18196/jai.v22i2.11393

SUMMARY

Research aims: The aims of this study is to prove the alleged effect of organizational resource slack on corporate social responsibilities (CSR) expenditures. The types of organizational resource slack examined in this study are financial slack, human resource slack, and innovational slack. This research was conducted in the mining sector as well as basic and chemical industries which are listed on the Indonesia Stock Exchange during 2015-2019. Design/Methodology/Approach: Non-probability sampling technique with purposive sampling method as the sampling method. It consists of 13 companies with total 54 sample of observations. Hypothesis testing used multiple linear regression.Research findings: The results showed that financial slack has negative effect on CSR expenditures. This supports agency theory which is used as a theoretical basis regarding management's tendency to manage slack over organizational resources. However, this study was unable to show the effect of human resource slack and innovational slack on CSR expenditures.Theoretical contribution/Originality: This study's results constitute empirical evidence related to agency theory in explaining the effect of financial slack to CSR expenditures.Practitioner/Policy implication: The results of this study can illustrate the tendency of management to allocate funds for CSRby considering the slack of various types of organizational resources. Improvements related to the implementation of Law No. 40 of 2007 about the responsibility of limited liability companies to carry out Social and Environmental Responsibility also needs to be concerned by the regulator.Research Limitation/Implication: The limitations in this study that can be taken into consideration for future research are related to very limited research data for certain variables. The availability of data related to CSR costs and research and development costs included in the annual report is very limited, so the number of samples processed is limited.

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